Stock Trading For Beginners

How to buy a stock

Selecting the stock is just like purchasing a car. In case of purchasing a car, you cannot purchase it at first sight where you need to conduct an examination on the color. It also requires you to check the hook, tires. If you do not have knowledge about it then you will ask your dad or the brother who knows more about it. If you are not clear with the sound or the mileage then you will wait till the arrival of better deal. It is same in case of selecting the stocks.

First and the foremost thing to be known by you before purchase of shares is the stock trading account. In case of first time refer the discount broker.  This type of broker will tell you how to buy a stock along with selling process and much more. You can find the stock brokers at your bank where it will available at affordable price level along with comfort ability. You can even make online backing.

how to buy a stock

Stock trading for beginners

At the time of first purchase you need to know how to buy a stock. Pick up three companies that suit your requirement. Take a newspaper and then note down the four things

Price

In case if the share is about 500dollars then skip the step

Years move

This explains the value of share and their growth rate compared to the previous year. Fairly good indication is the present target framed in this year.

Dividend Yield

It is the percentage value for every share where the company provides its shareholder every year. Some of the shares will not pay the dividend but develops the company’s position

Price/Earnings  

This is just a share divided made by the company in this financial year. It may mislead due to the current phase in the financial year. In case of high ratio it will result in projected growth with a little profit over the years. It is quite common during the “internet bubble” where the companies have huge profit but made less amount of money.

After knowing about the graph, move to the company’s website and then click on the “investor relations” where it requires you to download whole thing at the graph sheet to known about the dividend and the share price for the past year. After that read the newspaper reading the paper for more than a week will provide you best idea about the financial position.

Selecting the stocks is all about the learning the company. It is all about knowing how the company gets affected.  Now it is the time to make decision on the goals. First plan for your investment and write it down. Plan whether your want to build your capital for 10 year or you want to double the amount in one year but it also contains the risk of losing it. Strict investment philosophy suits best in case of stock trading for beginners.

How to start investing

At the beginning stage you can start trading with five hundred dollars. It is best to start the investment with small amount. It will be even more flexible if you start it thousand to two thousand dollars. Most of the people have the question how to start investing. You can even find the financial show on TV who talks more about the mid cap stocks and big cap stocks.  They even talks more about the blue chips where it provides more profit.

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